* Top 10 Things Smart Companies Should Know About Intellectual Property

Smart businesses should use all laws – including IP laws – to their advantage.

Before I launched Clock Tower Law Group in 2001, I worked for 6+ years in non-legal positions for various Internet companies. So I have seen how intellectual property works – or fails to work – in the real world. I advise my clients based on this real-world experience. My firm always puts your business goals first. For example, many patent lawyers view “the patent” as the client. But the patent is not the client. The business is the client. And sometimes the patent is not right for the business.

I have worked for startups that failed, I have worked for startups that succeeded, and while intellectual property (IP) is not just for startups, the IP decisions that startups make have long-term consequences (for better or for worse). So any time your company is thinking about launching a new anything (e.g. company, product, service, brand), you should include IP in your launch plans.

In short, smart companies can become wealthier by (1) acquiring their own intellectual property, (2) protecting their own intellectual property, and (3) avoiding infringing the intellectual property of others. Here are the top 10 things those smart companies should know.

1. Intellectual Property“Intellectual property” is an odd name for an important business asset. There are several types of “property” and several types of property law:

  • Personal property includes tangible items such as cars and boats.
  • Real property includes all flavors of real estate such as houses and condos.
  • Intellectual property (IP) includes patents, copyrights, trademarks, and trade secrets.

2. Intellectual PropertyThe Founding Fathers included patent and copyright protection in the Constitution. Article 1, Section 8, of the Constitution states that “The Congress shall have Power To … promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” So you are entitled to patent and copyright protection for your inventions and creations. In other words, intellectual property law exists. Just like tax law exists. And just as you can itemize your personal tax deductions to maximize your tax refund, you can take advantage of IP law to make your business wealthier. Or you can file the short form.

3. CopyrightsYou don’t have to register works in order to get a copyright. However, registering copyrighted works with the Copyright Office does provide additional remedies if a dispute with a copier arises at a later date. Copyright rights exist as soon as works are in a fixed form. Also, if you are creating copyrightable works, then you should mark them with a copyright notice as soon as they are in a fixed form to put others on notice. Something like this: “Copyright 2001-2010 Clock Tower Law Group. All rights reserved.”

4. PatentsIf you have a product or service that is better/faster/stronger than the competition’s, then you should be able to get a patent for it. At least this is how patent law is supposed to work. Note that improvements to existing products can also be patented. You should think about patents before launching new products or new versions of existing products.

5. PatentsTiming is everything. Don’t file too early, don’t file too late. To protect both US and foreign patent rights, keep your product secret, file the patent, then launch the product. Under US patent law, you must file a patent application within one year of selling, offering to sell, publicly using, or publishing your invention. The one-year “grace period” for these events starts whether you or somebody else discloses the invention. If you want to file for foreign patents, you must do so (1) before any public disclosure and (2) within one year of your earliest patent filing. One common mistake that inventors make is to file a Provisional Patent Application to get “patent pending” status for one year. But if you are unable to turn your idea into money during the “patent pending” year and can’t continue with the patent process, then you will have lost the benefit of the earlier filing date.

6. Patents vs. Trade SecretsTrade secrets can last forever and are sometimes a better choice than patents. Is it impossible to reverse-engineer your invention? Can you make sure your employees and vendors keep the invention secret? If so, then consider trade secret protection instead of patent protection. Also, if you only want to file for US patents, then you can keep your US patent application a secret by filing a “nonpublication request” at the time of filing. This way, if your patent application fails to result in an issued patent, then you can abandon the patent application and fall back on trade secret protection.

7. TrademarksCompanies, on average, have four unregistered trademarks. Trademarks, like trade secrets, can last forever – or at least as long as the trademark is used. The general rule is that (1) you should register the trademarks that you use and (2) you should use the trademarks that you register. You should register your company name, product names, service names, logos, slogans, taglines, icons, favicons, and anything else that you use to identify your company’s offerings (e.g. sounds, colors, numbers).

8. Trademarks and BrandingIt’s easier for owners of registered trademarks to protect their brands on the Internet. Owners of registered trademarks can more easily recapture (1) domain names from cybersquatters (via the UDRP or otherwise) and (2) social network identities (e.g. Twitter usernames and Facebook pages) from impostors. Indeed, cybersquatting and usernamesquatting are to businesses what identity theft is to individuals.

9. Domain NamesDefensively registering multiple domains is cheap insurance against possible infringing use. You should register you company name, product names, and trademarks as domain names in all of the generic Top Level Domains (gTLDs) (including .com, .net, .org, .biz, .info, and .us). You should also register common misspellings, including singular and plural variations. You should register domains in the name of your company using the exact same contact information for each domain. Better yet, use a trusted third party to hold your domain names in escrow, since many domain name thefts are inside jobs.

10. Prevention vs. CureIt is much easier to prevent IP problems than it is to fix them. Both patent law and trademark law provide the first-filers with advantages over second-filers. Monitoring services, such as the Mark Alert service from DomainTools, can help you find misspelled domain names, parody and commentary domain names (such as walmartsucks.org), and any misspelled domain names that you might have missed.

Erik J. Heels writes about technology, law, baseball, and rock ‘n’ roll. He is @ErikJHeels on Twitter.

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